Paying a fiver a month for a service that is genuinely exciting and innovative – is that really such a hardship?

Besides so many free Spotify users are near the tipping point – If I had a quid for every person who has told me recently that they are about to subscribe to the service but just haven’t quite got round to it the beers would be on me. If Spotify canned the free service then those users would have no choice. If the service was £5 a month the subscribers would base would be huge. The target is apparently to convert 7% of Spotify users into subscribers. Spotify hasn’t released figures but I guess the figure is a long way off at the moment, even after all the innovation. This way round I think 15% would be feasible. Offering limited free streaming (like Rhapsody) would be good for Spotify’s bank balance, but would undermine it as a brand and again give users another excuse not to pay up.

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4 thoughts on “The only way to save Spotify?”

Spotify disclosed that only 0.4% of their UK users were ‘premium’ at the end of July: http://quietdesparation.posterous.com/save-our-spotifyYour comment ‘If it’s pay up or lose, I know one which I’d choose’ sums up their plight – 99.6% of their users are ‘free-riders’ – a modern day Tradegy of the Commons.It would be a risky move forSpotify to can the free service. Not least because there are other free streaming services available e.g. Florida’s GrooveShark, which claims to have a catalog of 7million tracks

I’m kind of unsure why their ad-supported service doesn’t add to their revenue stream whereas commercial radio stations manage to survive just on adverts. I would guess Spotify have either overpaid for their back catalogue or are in dire need of a decent ad-sales team!That said, I’m sure if they dropped the free service quality to 96k mono then they’d still keep the selling point of "we’re free" whilst giving an incentive for users to take out a subscription. It’ll also save them a bit of bandwidth too, which should help the balance sheet.

I think it’s only a matter of time before advertising revenues begin to pour in, David. Very few media owners can claim to have a couple of million UK users in the 18-40 demographic – this is a unique proposition for advertisers. The Times headline appears gloomy, but the article centers on quotes from two parties with vested interests – the competitor Napster & a major record label. Long live Spotify!